‘No panicking’ on ASX over trade tensions

Derek Rose
(Australian Associated Press)

 

Australian shares have closed lower amid renewed concerns about US-China trade tensions, but a feared rout of the market was avoided.

The benchmark S&P/ASX200 index finished down 26.6 points, or 0.42 per cent, to 6,291.1 points at 1615 AEST on Wednesday, while the broader All Ordinaries was down 31.7 points, or 0.5 per cent, to 6,351.8.

All sectors of the ASX closed in negative territory, with tech shares collectively tumbling 1.98 per cent to lead losses.

“It’s certainly a negative day, but the selling that we’ve seen has been very orderly,” CMC Markets chief market strategist Michael McCarthy said.

“Nobody’s panicking at this stage. It’s not a crisis.”

But the market did breach the key technical level of 6,285, which could mean a further slide to 6,100 or 6,000, Mr McCarthy said.

Australia’s competition watchdog, the Australian Competition & Consumer Commission, surprised investors late in the day by accidentally revealing a day early that it was opposing the planned merger of TPG Telecom and Vodafone Australia.

Shares in both TPG and Hutchison Telecommunications – the co-owner of the Vodafone Australia joint venture – fell sharply as traders noticed the inadvertent disclosure on the ACCC’s website.

TPG closed down 13.53 per cent to $6.07, while Hutchison plummeted 28.13 per cent to 11.5 cents.

Among tech stocks, Afterpay Touch fell $1.90, or 6.68 per cent, to $26.56 after competitor Flexigroup announced retailers including Myer and IKEA had signed up to its new buy-now, pay-later service called humm.

Flexigroup shares gained 24.44 per cent to $1.68, while rivals Zip and Splitit were both down three per cent.

Mining giant BHP fell 0.32 per cent to $37.18 after it was sued for $7 billion in Liverpool, England, over a 2015 dam failure in Brazil.

Treasury Wine Estates dropped 6.62 per cent to $15.10 after allegations by a US hedge fund that it had engaged in “channel stuffing,” or sending retailers more wine that they could sell.

Also, the company revealed that chief executive Michael Clarke had offloaded 400,000 shares last week for $6.9 million.

Trading in the TWE was well above average, and Mr McCarthy said it looked like there would be an “arm wrestle” for the direction of the company’s shares.

Shares in AP Eagers dropped 2.2 per cent to $8.88 while Automotive Holding Group dropped 0.83 per cent to $2.38 after the AHG board backed AP Eagers’ takeover offer, which would create Australia’s largest chain of automotive dealerships.

Shares in New Zealand companies Xero and A2 Milk were both down, 1.07 per cent and 1.3 per cent, respectively, after the Reserve Bank of New Zealand cut interest rates by 25 basis points to 1.5 per cent.

The New Zealand dollar dropped sharply but quickly rebounded to 65.94 US cents.

“It does look like the rate cut was largely priced in,” Mr McCarthy said.

The big banks were mostly in the green, with Westpac up 0.3 per cent to $27.14, Commonwealth up 0.17 per cent to $74.74 and ANZ up 0.33 per cent to $27.59. NAB fell two cents to $25.82.

The Aussie dollar is buying 70.20 US cents, from 70.35 US cents on Tuesday.

ON THE ASX:

* The benchmark S&P/ASX200 index was down 26.6 points, or 0.42 per cent, to 6,269.1 points at 1630 AEST on Wednesday.

* The All Ordinaries was down 31.7 points, or 0.5 per cent, to 6,351.8.

* At 1630 AEST, the SPI200 futures index was up three points, or 0.05 at 6,243.

CURRENCY SNAPSHOT AT 1630 AEST:

One Australian dollar buys:

* 70.20 US cents, from 70.11 US cents on Monday

* 77.30 Japanese yen, from 77.30 yen

* 62.66 euro cents, from 62.64 euro cents

* 53.81 British pence, from 53.63 pence

* 106.51 NZ cents, from 106.23 cents

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